HCA Healthcare

HCA is a for-profit medical facilities operator that owns 186 hospitals and over 2,000 other care sites. HCA was initially public, but went private in 2007 after an insider trading scandal and allegations of making false business claims. The company went public again 3 years later in 2010. The company’s stock has almost doubled in the past year and has shown consistent growth over the past 5 years with a current market cap of over $66 billion.

2019 Strategy

HCA listed the following as their 2019 strategic goals: - Grow our presence in existing markets - Achieve industry-leading performance in clinical and satisfaction measures; - Recruit and employ physicians to meet the need for high quality health services - Continue to leverage our scale and market positions to grow the Company - Pursue a disciplined development strategy

Our thesis, however, is that as a for-profit company that should theoretically be generating as much revenue per patient as a not for profit company, HCA has an incentive to cut down on opex per patient as much as possible. We sought to test the effect/presence of this conflict of interest.

Empirical Model

Data

We utilize the Health Costs Reporting Information System (HCRIS) database, known colloquially as the Medicare cost reports. The cost reports are filed annually by hospitals to the Centers for Medicare and Medicaid Services (CMS), and are mandated for federally qualified health centers, including hospitals that receive Medicare reimbursement. The cost reports contain valuable information on hospital financial statements: including revenues, discharges, and operating expenses per fiscal year. We obtain cost reports from 2010 through 2020, and implement processing scripts from Ian McCarthy and the National Bureau of Economic Research (NBER) to extract human-readable datasets.

There are 6738 unique hospitals represented across the 10 years, filing over 57379 cost reports in the ten-year span. A subset of the cost reports for the UVA Health System is shown below:

We also scrape information on HCA ownership

Scraping Hospital Locations from HCA Healthcare

Exploration

Statistical Modelling